There's nothing like a darkening economic climate and rising competitive pressures to focus a business's priorities.
Like their counterparts in other commercial sectors, pharmaceutical organisations are being forced to re-examine their core and non-core activities to determine where new efficiencies can be found, and to drive greater productivity and competitive agility into their operations.
This is leading to a surge of interest in outsourcing of non-core activities, as pharma organisations attempt to sharpen their practices and reduce time to market.
There are other challenges they need to address, too. The era of the blockbuster drug is over, competition from generic drug manufacturers is increasing, and drug development pipelines are slowing.
Pharma organisations needs to respond by re-evaluating and streamlining their business processes, removing redundancy and repetition to enhance efficiency and reduce internal costs, so that they can move more deftly and exploit opportunities more cost-effectively.
Breaking old habits
This is easier said than done, however. This is an industry where habits and legacy processes are ingrained and there is a resistance to change.
Yet, for many, particularly those worried about their agility and long-term competitive edge, or caught up in the complexities of mergers and acquisitions, it is clear that something must be done to make their operations slicker.
As part of this re-evaluation process, organisations are being forced to go back to basics and to differentiate between value-added business processes and non-core administrative activities that drain time and resources (Fig. 1).
Many companies have already been tightening their operations around core activities such as R&D and marketing, relying on outside vendors to handle non-core activities such as clinical trials.
The submissions burden
The onerous burden of licence submissions is now going this way too. Growing adoption of electronic submissions, particularly eCTD-compliant submissions (based on the electronic Common Technical Document standard) means that managing all of the content and documentation has become a substantial job. This is especially true in Europe, where publishing requirements vary from one country to the next.
As a result, there is now a growing interest in managed services, where an external specialist is enlisted to take over non-core activities, freeing up skills internally. Fortuitously, this growth in demand has coincided with an increasing availability of specialist managed services.
'Strategic sourcing' is proving particularly popular. This is a more flexible form of outsourcing, which draws on the most appropriate combination of offshore, onshore, and onsite resources.
It offers pharma organisations substantial cost benefits (derived from the service provider's superior economies of scale); faster time to market (through rapid access to the right skills and the latest technologies); and the ability to refocus internal energies to more pressing business activities.
In many industries, including pharmaceuticals, take-up of hosted software solutions (SaaS) is accelerating, offering fast, affordable access to the latest applications.
This has led to the realisation that outsourcing needn't stop there. If pharma organisations are going to entrust the management of their software and hardware to a third party, why not go further and let a reputed expert look after some or all aspects of the broader operation?
Nowhere does business process outsourcing (BPO) have greater appeal than in the complex and time-consuming business of regulatory submissions management, where good experts are hard to find, and processes have become increasingly onerous, thanks to the mandate to submit electronically. The opportunity to let external experts host and even co-manage the submissions process offers significant value.
Harnessing the familiar interface of the web, yet with the reassurance of robust security, the outsourced solutions allow users to access, view, edit and share documentation from their office desks as usual. The big difference is that the company no longer needs to own the software, and is able to let go of many of the processes involved in managing a licence submission. What's more, this also gives them the opportunity to quickly and easily scale operations up or down as market conditions and demand dictates.